Issue link: https://mbozikis.ufcontent.com/i/1422521
239 Section 923 of the Bankruptcy Code requires that notice of the commencement of the Chapter 9 case (as well as notice of an order for relief or dismissal of case) be given to creditors and also be made by publication. Pursuant to Section 921(c), objections to the petition are permitted and are to address whether the Chapter 9 debtor has met the eligibility requirements of Section 109(c) and whether the petition was filed in good faith. One of the most frequently litigated issues in the Chapter 9 arena is whether the entity has met the eligibility requirements to be a Chapter 9 debtor. Often objections will challenge whether the State approved the municipality to file and whether negotiations were conducted in good faith. Under Section 921(c), the bankruptcy court is required to hold a hearing, upon notice, in response to any objections and may dismiss the petition if it finds the petition was not filed in good faith or the debtor did not meet the eligibility requirements of Section 109(c). See In re Suffolk Regional Off-Track Betting Corp. 462 B.R. 397 (Bankr. E.D.N.Y. 2011), where the Bankruptcy Court ruled that the Suffolk County legislature's approval was not sufficient to authorize Suffolk OTB to seek bankruptcy protection and that Suffolk OTB would need explicit approval from the State government which legalized county owned OTBs in the 1970s. The Court found that the County's resolution was an impermissible attempt to legislate in an area preempted by State law. The Court distinguished the case from In re N.Y.C. Off-track Betting Corp., 427 B.R. 256 (Bankr. S.D.N.Y 2010), where the off-track betting corporation's authority to seek Chapter 9 relief was unsuccessfully challenged in light of the executive order which had been issued by the governor specifically authorizing the filing of the petition and the finding that the governor was a governmental officer empowered by State law to authorize the filing within the meaning of Section 109(c)(2). Section 921(d) requires that if the petition is not dismissed, the court must enter an order for relief. Further, Section 921(e) provides that notwithstanding an appeal of an order for relief, the bankruptcy court cannot delay or stay the bankruptcy proceeding.